According to the Labuan Companies Act 1990, foreign investors can set up Labuan trust companies, limited partnerships, Islamic partnerships, limited liability partnerships and international companies in Labuan or IBCs as they are known. Those interested in a fast business can direct the attention to shelf companies available in Malaysia. The minimum share capital imposed depends on the type of company registered. In this matter, you can benefit from complete support provided by our team of company formation agents in Labuan.
What is the minimum share capital for an IBC in Labuan?
The minimum share capital of an IBC in Labuan is set at just one USD, being considered symbolic and a requirement that allows foreigners to focus on future investments and many more. The following table shows information about the minimum share capital for popular business structures an investor can establish in Labuan:
| Type of company | Purpose of business | Minimum share capital | Corporate tax rate | Government approval for foreigners |
| IBC | International trading | $1 | 3% | No |
| Labuan trust | Asset Protection | $60,000 | No tax | No |
| Shelf Company | Ready for business | $1 | 3% | No |
| Partnership | International trading | $1 | 3% | No |
If you are a foreign investor looking for business in Labuan, you can decide on a shelf company which is a ready-made company already registered for which the minimum share capital is set at one dollar. There is also the possibility of opening a representative office for marketing and research purposes for which the minimum share capital is the same. Please do not hesitate to get in touch with our team of company incorporation specialists in Labuan and find out more about the conditions for opening a company in Labuan.
Tax facts in Labuan
There are many reasons why foreign entrepreneurs want to set up offshore companies in Labuan, and among these, the tax regime is of high importance. For example, there is no withholding tax for dividends, royalties, and interests, the imported products are free from taxation, there is no stamp duty and products for sale purposes in Labuan are exempt from sales tax. The double taxation agreements signed by Malaysia with countries worldwide are meant to protect businesses and entrepreneurs from paying the taxes twice. Among the tax incentives offered by the government, we mention that Labuan entities are free to invest in local companies and benefit from a series of tax exemptions.
Requirements for opening a company in Labuan
The minimum share capital is mandatory at the time a company is registered. Normally, a corporate bank account in Labuan needs to be set up before the minimum share capital is provided, whether it is for an IBC, a shelf company or a Labuan trust. Among the conditions for opening a company in Labuan, having at least one shareholder and one director, plus company secretary are mandatory. In the case of partnerships, an agreement needs to be provided at the time of registration.
Why open a company in Labuan?
Labuan is an important offshore jurisdiction and one of the premier Islamic and Asian financial centers in the world that allow foreign investors to set up their operations. The tax regime provides many advantages for entrepreneurs. Moreover, the conditions referring to the minimum share capital are not only acceptable but also appealing from a business point of view. Opening an International Business Company in Labuan means preparing the minimum share capital of one dollar. The same thing is available for shelf companies and partnerships in Labuan, Malaysia. Only one shareholder is necessary for opening a company in Labuan, plus a unique name which needs to be approved by the entitled registration authorities. It is good to know that the appointed directors of a company do not need to live in Labuan. Also, a company in Labuan can have other corporations as company directors, if the owners want to.
Offshore companies can be easily registered as long as they respect the rules and regulations of Labuan Financial Services Authorities, among which, the ones related to the minimum share capital.
We kindly invite you to contact our team of company formation representatives in Labuan and solicit comprehensive information about the rules for opening a Labuan company, including the ones of the necessary minimum share capital. Complete assistance is provided to foreign investors looking to incorporate their activities in Labuan.
The costs associated with starting a Labuan offshore company can also vary based on the specific sector of interest. A basic offshore company can cost around $18,000 (in the startup phase).
Companies operating in the securities market or the forex market can cost $20,000 and more than $30,000 respectively, so investors should make sure that they dispose of the necessary capital required for the activity of interest.